6-25-2018; What Is A Medicare Set-Aside and How May the New U.S. Senate Bill Help?; Sweeping New IL Medical Payment Legislation That, If It Becomes Law, Will Dramatically Impact All IL WC Claims

Synopsis: What Is A Medicare Set-Aside and How May the New U.S. Senate Bill Help?

Editor’s comment: I want to help all my readers on this complex claims topic. Lots of folks don’t understand the whole MSA or Medicare Set-Aside process. There is a new federal attempt to make it work better.

• First, What is a Medicare Set-Aside?

A Medicare Set-Aside is a trust-like arrangement set up to hold a portion of injury settlement proceeds for future medical expenses. A specialized company, like Sharpline Allocations, evaluates the injured worker’s future medical needs, recommends an amount to be set aside to cover future medical care and our federal government or their designated specialists approve the recommended amount. The funds are then either placed in the Medicare Set-Aside account in one lump-sum or the account is funded with a "structured settlement annuity" that will refill the account over time. In either case, the administrator of the Medicare Set-Aside trust may use the funds only to pay for medical care related to the injury, leaving Medicare or your private insurance free to provide coverage for medical expenses not related to the injury.

Medicare Set-Asides have been used for years in workers' compensation cases, and the federal government has an extensive set of reporting and monitoring rules. Recently, the federal government instituted a new set of reporting requirements for anyone who is responsible for compensating a personal injury victim, and many practitioners believe our government will soon require Medicare Set-Asides for all personal injury claims/settlements of any kind.

Currently, our federal government requires setting up a Medicare Set-Aside if the worker is a Medicare recipient settling a claim for more than $25,000 or if the settlement is for more than $250,000 and the worker can be expected to receive Medicare benefits within 30 months of settlement. This may happens when the worker receives Social Security Disability benefits, which has a 24-month waiting period before the worker can receive Medicare benefits.

• Second, U.S. Senate Bill Aims to Clarify/Simplify Frustrating Medicare Set-Aside Process

Observers feel a bill introduced in the U.S. Senate last week may clean up what has been a messy approach to Medicare set-asides. U.S. Senate Bill 3079, sponsored by Sen. Rob Portman, R-Ohio, and Sen. Bill Nelson, D-Florida, is a new and improved version of a bill introduced two years ago but which never emerged from committee.

The new bill would essentially force the Center for Medicare and Medicaid Services (CMS) to recognize provisions of states' workers' compensation laws, and would allow injured workers to pay Medicare's share upfront after a settlement instead of having to remember payments for the rest of their lives.

"This says, let's have a process that works for all parties involved," said Douglas Holmes, president of UWC Strategy in Washington, D.C., which lobbies and consults for businesses on unemployment and workers' compensation legislation. UWC led a coalition of insurance groups and claimants' attorneys that helped craft the bill. "We feel this reduces risks and reduces administrative costs."

While the process of handling Medicare's share in workers' compensation settlements has evolved over the past 50 years, it's never been formalized or codified, and remains inconsistent. "This will help injured workers finalize their claims and get money for settlements faster," said Ann Gray, assistant vice president of federal government relations for Property Casualty Insurers Association of America. The bill would also provide clear criteria for CMS to follow and would eliminate unnecessary reporting to the CMS, she asserts.

One problem with the current process is that in many cases, parties may have reached a potential settlement, only to have CMS reject the amount designated as a set-aside. This can completely change resolution and the settlement, particularly in major claims.

The new version of the Senate bill, known as the Medicare Secondary Payer and Workers’ Compensation Settlement Agreements Act of 2018, would address that by instituting a formal appeals process. CMS now has an informal review policy, but the reviews are limited and are done at the sole discretion of CMS. "A specific appeals provision is needed in statute," the analysis said. The suggested appeals process could "require more time and costs, so that could create another problem for carriers and employers," said Dan Anders, chief compliance officer at Tower MSA Partners. 

Under the current process, Medicare has been inconsistent in its acceptance of state requirements, experts asserted. "If a workers’ compensation settlement agreement is accepted, reviewed, approved or otherwise finalized in accordance with the workers’ compensation law of the jurisdiction in which such agreement will be effective, such acceptance, review, approval or other finalization shall be deemed final and conclusive as to any and all matters within the jurisdiction of the workers’ compensation law," the new bill reads.

Rather than manage the MSA for a lifetime, the new bill would give the worker the option of making a direct, one-time payment to Medicare. "Such transfer shall be made only upon written consent of the other party or parties to the agreement," the text of the new bill reads.

The measure also would require Medicare to set up a mechanism to accept the upfront payment, something the agency is not equipped for under current law.

Current statistics on set-asides nationwide were not available Wednesday, and Anders and Holmes said that a lack of data from CMS has been part of the problem. In 2013, The National Council on Compensation Insurance estimated workers’ compensation carriers throughout the country paid about $1.8 billion in Medicare set-asides that year. That number continues to rise with inflation and may be $3B annually at present.

Senate Bill 3079 has been assigned to the U.S. Senate Finance Committee.

Synopsis: Thoughts from Dr. David Fletcher on Sweeping New Legislation That Will Impact All IL WC Claims. This Will Be a Seminal Change That is a Must-Read for All Claims/Risk and Other System Participants.

Editor’s comment: Here is His Guest Commentary Published Without Editing | Doc Feels a Crisis Looms in the IL Workers' Comp System

Please Note Amendment 2 of IL Senate Bill 90 has passed by both IL legislative houses and has been sent to Governor Rauner for signature and enactment.  

This unprecedented bill replaces everything after the enacting clause. It amends the IL Workers' Compensation Act in relation to fees and electronic claims. The new bill, if it becomes law, requires a medical provider to bill an employer or its designee directly. This bill provides the employer or the insurer must send to the provider an explanation of benefits or EOB. The bill requires employers and insurers to pay interest to providers at the rate of 1% per month for services rendered on and after the effective date of this amendatory Act if the bill is not paid promptly. The bill authorizes providers to bring an action in circuit court to enforce the payment procedures with regard to services rendered on and after the effective date of this amendatory Act. The bill also requires the IL Director of Insurance to adopt rules to ensure that providers have the opportunity to comply with requests for records by employers and insurers. Finally, the bill imposes penalties upon employers and insurers that fail to comply with the electronic claims process. If Governor Rauner signs the bill, it will become law effective immediately.

By DR. DAVID FLETCHER

There's a crisis looming in our state's workers' compensation system. If allowed to fester, it will keep workers from receiving timely medical treatment for workplace injuries. It will delay workers' recoveries and their return to their jobs. And it will end up costing more for the very businesses and insurers seeking efficiencies in the system.

This crisis is not one you've heard about from the business and insurance communities. It's a crisis created by their failure to implement laws that have been on the books in Illinois for more than a decade.

As doctors who care for workers compensation patients, here are our concerns: Illinois law spells out the right for medical professionals to receive prompt payment for the care we give to patients with workplace injuries.

Just like any other business or profession, we need to be paid for that care we give, so that we can compensate our employees and keep open the doors of our medical practices.

Yet, many Illinois workers' compensation insurers completely ignore the prompt payment law. To date, there has been no remedy for doctors and other caregivers who remain unpaid for months and months at a time.

Furthermore, state law mandates that insurers accept electronic billing and documentation for workers' compensation claims. This expedites the process.

Yet, many insist on an obsolete paper-based medical billing system, which delays medical care to injured workers and wastes resources.

Add to this bleak reality a recent, alarming increase in delayed payments for already-approved workers' compensation medical care claims. The result is more and more physicians unable or unwilling to treat injured workers.

Since 2005, the Workers' Compensation Act has allowed medical professionals a late interest penalty for approved workers' compensation medical care.

Yet there is no way for doctors and others to enforce or collect this interest.

Even if the workers' compensation insurer approves care for an injured worker, it can and often delays payment for the medical treatment rendered. These delays can last for years.

A recent court ruling found that medical professionals can't even go to court to collect this interest.

Since the court decision, these payment delays have worsened to the point of doctors dropping out of the system.

What's lost in the current debate on workers' compensation policy is that medical professionals — the physicians, surgeons, hospitals and specialists — actually provide the care that supports our entire system.

Medical professionals are the ones who get injured employees back to work, reduce employer costs for time off and long-term injuries and work with employers to prevent work-related accidents from even happening in the first place.

We are often blamed for the system's ills, even though we are in a unique position to make that system function.

When workers are hurt on the job, they need timely access to dedicated physicians, surgeons and specialists to treat their injuries. We in the medical community stand ready with solutions to the problems that are threatening the health of our workers' compensation system.

It's time to pass legislation that forces workers' compensation insurers to start following the law. The alternative is having doctors and care centers rush to the exits.

I appreciate your thoughts and comments. Please post them on our award-winning blog. If you want me to relay your comments to Dr. Fletcher, I will do so without editing.

6-18-2018; NASI Report Indicates IL WC Dropped Compared to Rest of U.S.; Kevin Boyle on IN WC Settlement Change and more

Synopsis: Illinois Work Comp Benefits Paid Dropped Compared to Rest of U.S. Per NASI Report and Analysis.

Editor’s comment: In Illinois, workers’ compensation benefits dropped in recent years compared to the rest of the U.S., according to a recent report from the National Academy of Social Insurance or NASI. We attribute this measured decrease in IL WC costs to the impact of

• More conservative and business-focused Arbitrators and Commissioners appointed by Republican Governor Bruce Rauner;
• The recent change by our IL Appellate Court, WC Division to leave IWCC denials alone and not reverse denials to award benefits under the “manifest weight of the evidence” standard, as I feel they were sometimes doing. The panel has also issued what I feel are common sense rulings like Dorsey v. IWCC that provided employers statutory credit for prior loss of use of the arm/shoulder awards-settlements despite the fact such awards are now rendered on the “body as a whole.”
• The continued exodus of jobs and humans from Illinois continues as the out-migration continues to move folks and businesses away from Illinois with the highest combined sales, property and income taxes in the U.S. Fewer jobs mean lower WC benefits being paid.

Please remember Governor Rauner appears to be trailing in the coming November election. Thousands of retired IL government workers are aligned against him—they will be voting on one issue—protecting their impossible-to-fund fake government pensions. To avoid upsetting that voting bloc, neither gubernatorial candidate is discussing or trying to “reform” this massive government catastrophe. Please also remember the IL minimum wage will skyrocket to $15 an hour if the Democrat wins the November election. That increase should end more jobs but also make WC claim costs higher for lower-paid workers who remain in this State.

Finally, and with respect to NASI, I feel the best metric on IL WC claim costs is the every-other-year ranking of U.S. WC premium costs by the State of Oregon—sadly, their next report isn’t due until after that gubernatorial election but oddly may be released in the same month—November 2018.

Either way, the NASI report In 2015, workers’ compensation benefits paid in Illinois were $2.4 billion. I am sure the annual IL benefit outlay exceeded $3B in years past. The National Academy’s stat rats confirmed between 2011-2015, Illinois experienced a 19.3 percent decrease in benefits paid, the second largest decrease across the country. Total benefits in the rest of the U.S. increased by 2 percent over the same period (Table 1). According to the report, Workers’ Compensation: Benefits, Coverage, and Costs, the large decrease in total WC benefits in Illinois is most likely attributable to a number of legislative changes implemented in 2011 that regulated the medical delivery system.

In Illinois, both medical and cash WC benefits decreased between 2011 and 2015, but the percentage decrease in medical benefits was 50 percent greater than the decrease in cash benefits (-23.3 percent vs. -15.6 percent). As a result, medical benefits as a share of total benefits paid in the state fell from 47.7 percent in 2011 to 45.3 percent in 2015. Among all states, Illinois had the seventh lowest percentage share of medical benefits relative to total benefits paid in 2015. Illinois also experienced slower growth in employer costs for workers’ compensation relative to other states. Between 2011 and 2015, costs in Illinois increased 3.8 percent, well below the 21.6 percent increase in costs that occurred in the rest of the U.S.

Table 1. Workers' Compensation Benefits, Coverage, and Costs:
Illinois and the Rest of the U.S.

2015

Percent Change 2011 to 2015

IL

Rest of U.S.
(non-federal)

IL

Rest of U.S.
(non-federal)

Aggregate Benefits, Coverage, and Costs

Total Benefits (billions)

$2.4

$55.7

-19.3%

2.0%

Medical Benefits

$1.1

$28.8

-23.3%

1.9%

Cash Benefits

$1.3

$26.9

-15.6%

2.0%

Covered Workers (thousands)

5,754

127,083

5.2%

8.1%

Covered Payroll (billions)

$320

$6,652

16.0%

19.4%

Employer Costs (billions)

$3.9

$86.0

3.8%

21.6%

Other findings on workers’ compensation in Illinois from the Academy’s report include:

• Increases in employment and payroll covered by workers’ compensation were slightly below the growth in the rest of the nation. In 2015, covered employment reached 5.8 million in Illinois, up 5.2 percent from 2011 (compared to an 8.1 percent increase for all other states), and covered payroll was $320 billion, up 16 percent from 2011 (compared to a 19.4 percent increase for all other states).

• Workers’ compensation benefits paid in Illinois declined as a share of payroll to $0.75 per $100 of covered payroll in 2015, down from $1.08 in 2011 (Figure 1). Illinois experienced the third largest decline in benefits as a share of payroll among all states during that period. Benefits as a share of payroll declined in the rest of the U.S., but at a much more gradual pace.

Figure 1. Workers' Compensation Benefits per $100 of Covered Payroll, 2011-2015: Illinois and the Rest of the U.S. (non-federal)

• Costs as a share of payroll in Illinois decreased from $1.37 in 2011 to $1.23 in 2015 (Figure 2).While costs as a share of payroll in Illinois were higher than the rest of the country in 2011 ($1.37 vs. $1.27), they fell below the rest of the country in 2015 ($1.23 vs. $1.29).Illinois experienced the eleventh largest decline in costs as a share of payroll between 2011 and 2015.

Figure 2. Workers' Compensation Costs per $100 of Covered Payroll, 2011-2015: Illinois and the Rest of the U.S. (non-federal)

I appreciate your thoughts and comments. Please post them on our award-winning blog.

Synopsis: Have you heard the news? There are brand new Indiana Section 15 (full and final settlement agreement) requirements and submission procedures, too. Article and analysis by our IN WC Defense Team Leader, Kevin Boyle, J.D.

Editor’s comment: The Indiana Worker’s Compensation Board just released the eagerly awaited new protocol for submitting Section 15s that will go into effect in the next 30 – 45 days. A full and final settlement agreement in Indiana is commonly known as a “Section 15.” We call them “Section 15s” because the last number of the Indiana WC statute that provides for these agreements ends in section 15. Most Indiana WC claims that are settled use Section 15s because there are tremendous benefits to closing your WC claims with them.

The below list isn’t all inclusive, but contains the main changes. If you’d like a complete list, please email me at kboyle@keefe-law.com. Also, although the changes don’t go into effect right away, the IWCB requests that we include the information as soon as possible.  

Here’s a partial list of key new elements to include in future Section 15s:

• The number of weeks of TTD paid.
• Estimated total medical expenses paid.
• If there are outstanding medical bills, indicate the party that has responsibility to pay them with specificity if necessary.
• Future medical care and financial responsibility obligations.
• PPI calculations. If no PPI was assessed, explain why.
• Permanent restrictions, if issued.
• If Perm Total Disability is an issue, including language that the 15 does not bind Second Injury Fund, and that a determination of eligibility will be made at the time of application.
• Injured worker’s email address and phone number if known.
• Include the date of birth of the injured worker.

Extra supporting documentation to attach to the Section 15, too:

• Final medical report of treating physician.
• IME report, if any
• PPI report and accompanying hand or foot chart, if relevant.
• Employee waiver, if any.
• FCE report, if any and if relevant.

Additionally, and probably the most significant news, are the following two changes. 

First, the submission procedures are changing decades of “how we used to do it.” The IWCB finally is going to start accepting electronically filed Section 15s through emails. They will be emailed instead of sent/delivered to the IWCB in paper form through the mail. These new email procedures haven’t been finalized yet so, we can’t email them in just yet. It should be implemented in the next 30 – 45 days.

Second, the individual hearing members will now sign the Approvals, instead of submitting the Section 15s to the IWCB administrative office as we’ve done for years, too. That’s another huge change. We are not sure yet how that could affect how quickly Approvals are signed, but we’ll find out more in the coming months, and I’ll let you know.

Again, if any questions on these changes, and other settlement agreement issues that could affect your claims, please email me, kboyle@keefe-law.com. Even if I’ve not been on your claim as it was handled, if you reach a settlement on your case and need a quick Section 15, contact me.

6-11-2018; RUMC Increases Its PTSD Treatment Capabilities With Grant--Will WC Treatment Follow?; How to Become Self-Insured for Work Comp in Indiana, by Kevin Boyle, J.D. and more

Synopsis: RUMC Taking the Point on PTSD Treatment in the Midwest U.S. Will Treatment for Your WC Claimants Follow?

Editor’s comment: After a recent shooting in Florida, lots of WC claimants are seeking WC benefits for PTSD or Post-Traumatic Stress Disorder due to the stress of everyday work. The problem with this concept is authentication—the fine line between true psych injuries and folks that want to game the system to bank WC benefits for life.

We just learned Rush University Medical Center is getting its biggest gift ever—$45 million from the Wounded Warrior Project to fund mental health care specifically for military veterans. As one of our top defense lawyers, Shawn R. Biery is a former U.S. Marine (and the son of a former Marine), we are sensitive to the stresses of the battlefield and the need to provide care to post-combat military veterans. If someone has a real psych injury and real PTSD issues, they need real treatment.

When we move to the private sector, we worry about your municipality and mine when every police officer and fire fighter seems to be lining up for work comp or duty disability benefits for the normal stresses of the work they applied for and accepted when hired. Every day work of police officers and firefighters can’t result in numerous folks going on the dole. If the work stress is real and intense, the workers need to be treated and brought back to less stressful settings. We feel the experts on PTSD at RUMC are going to draw the line on what is real and what is fantasy.

Either way, two years ago the same charity gave $15 million to the Rush University Medical Center to start outpatient treatment for post-traumatic stress disorder. This new money will expand those efforts.

We note, of the 262 veterans who underwent a three-week Intensive Outpatient Program, more than 60 percent no longer "meet criteria for PTSD," said Dr. Mark Pollack, chair of Rush's psychiatry department. To me, that indicates the program is designed to maximize authentication of who needs care and lost time from work and who has to fight the good fight to stick it out and get back to the work force with the rest of us.

Michael Linnington, CEO of the Jacksonville, Fla.-based Wounded Warrior Project, said Rush's "phenomenal results" paved the way for additional funding, expected to cover 1,500 more veterans over five years.

Rush is one of four hospitals participating in the Wounded Warrior Network and the first in line for renewed support, he said. The other members are Emory Healthcare in Atlanta, Massachusetts General Hospital in Boston and UCLA Health in Los Angeles.

Between 90 percent and 95 percent of PTSD participants complete Rush's program, compared with a third who finish behavioral health therapies "strung out months" by the VA, Linnington said. "The beauty of this program, it is an intensive outpatient program. The only thing that separates it from inpatient, they don't sleep at night in the hospital."

The Intensive Outpatient Program is part of Rush's Road Home Program, begun in 2014 with funding from the McCormick Foundation and other donors; it has treated nearly 1,300 veterans and expects to provide therapy and counseling for another 3,500, including family members, over the next five years.

My suggestion/recommendation for my readers is to try out the program at RUMC and report back on the efficacy of what they are offering. Please let me know how they do, moving forward and I will continue to monitor and report.

I appreciate your thoughts and comments. Please post them on our award-winning blog.

Synopsis: How to Become Self-Insured for Work Comp in Indiana, by Kevin Boyle, J.D., KCB&A’s Indiana WC Defense Chair.

Editor’s comment: If you are a risk/safety/HR manager for a company that may qualify to be self-insured for your Indiana operations, Kevin Boyle is your go-to guy to assist in that process.

Kevin confirms the Indiana WC Board’s  2018 Self-Insurance Application and Guidelines are now available.

The IWCB just released their 2018 Self-Insurance application and guidelines. They are easy to complete and, if you can become self-insured, the savings may be dramatic.

Completed applications should be returned to the IWCB no later than July 31, 2018, and late or incomplete applications are subject to late fees.

Safe web links to the seven IN WC self-insurance forms are available on line here: https://www.in.gov/wcb/2367.htm.

Pursuant to I.C. 22-3-5-1(b), renewal applications must be accompanied by a payment of $250.00.

The IN WC Board does not accept cash payments. Checks or money orders must be payable to "Worker’s Compensation Supplemental Administrative Fund."

Incomplete applications and renewal applications received after July 31, 2018, will be charged an additional $250.00 late fee.

Deadline extensions shall be granted only under extraordinary circumstances and at the Board’s discretion. 

If you have further questions/concerns, email Kevin Boyle at kboyle@keefe-law.com.

Synopsis: E-Notice Announcement from IWCC.

Editor’s comment: IWCC Chairman Joann Fratianni announced another important step forward in the IWCC's modernization and technological upgrade of operations. Pursuant to the IWCC's Rules, as found in Section 50 of the Illinois Administrative Code, parties will receive case activity notices electronically beginning in about a month on July 2, 2018.  

The IWCC will no longer send most case notices via U.S. Mail as of this date.*  All parties (law firms on behalf of clients and pro se litigants) will be required to maintain a designated electronic mail ("e-mail") address for receiving case notices, just as they are now required to maintain a physical address to receive them by U.S. Mail. You only need to fill out the "E-Mail Registration Form" once (just like providing us your physical address), so they can update their system.  

PLEASE NOTE that it does not matter if you already have an e-mail on file or in use with the IWCC – they are populating the system with new and updated information.  So, please submit a law firm/pro se e-mail address to the IL Commission again.

* The only exception to electronic notices is Respondent parties at the time a case is initially filed will be notified that a case has been filed against them by U.S. Mail at the address provided by Petitioner. This is the current practice and won’t change.

Attorneys – Their system links cases before the IWCC to the law firm, not the individual practitioner.  So, please provide the IWCC your firm's e-mail address for receipt of electronic notices. If one of your attorneys "updates" your firm e-mail address with their own, all firm notices will go to the most updated address.

If you have questions on this process, send me an email.